Australia retailers have seen their share prices hammered, as a survey of consumer confidence plunged to its lowest level in over three years.
The Westpac – Melbourne Institute Consumer Sentiment Index dropped by 5.7% in December, to 91.1, following two months of gains in October and November. Westpac chief economist Bill Evans labelled the result, 'disturbing', noting that it's at its lowest level since August 2011 – and not far off levels last experienced during the Global Financial Crisis – as you can see in the chart below.
"Respondents are clearly concerned about the outlook for the economy and job security", he said, adding, "There is ongoing disillusionment about the May budget, six months after it was announced."
Source: Westpac/Melbourne Institute
Harvey Norman Holdings Limited (ASX: HVN) was the hardest hit, losing 4.7% to end at $3.43, but the retailer was closely followed by bedding store owner Joyce Corporation Ltd (ASX: JYC), which lost 4.6% to 52.5 cents, Premier Investments Limited (ASX: PMV) down 3.8% to $10.27, Specialty Fashion Group Ltd (ASX: SFH) also down 3.8% and Super Retail Group Ltd (ASX: SUL) down 2.9% at $7.31.
Perhaps surprisingly, consumer electronics retailers JB Hi-Fi Limited (ASX: JBH) and Dick Smith Holdings Ltd (ASX: DSH) posted solid gains of 0.9% and 1% respectively.
The fall in consumer confidence numbers is a big blow, coming just before Christmas, and right in the middle of most retailers' peak shopping periods for the year.
A few weeks ago, the National Retail Association (NRA) forecast sales to Christmas Eve to be around 5% higher than last year's whopping $40.7 billion. Chief executive Trevor Evans said it appeared to be back to business as usual, after several sluggish years of growth.
But now those projections look highly optimistic given the consumer confidence data. Most retailers could be in for another sad and sorry Christmas shopping period.
